Thursday, July 09, 2015

There's a sneaky proposal in Congress -- backed by many Republicans --
to enable states to make out-of-state businesses collect sales taxes
from online purchases. Among the many silly arguments being used to
foist this on the public is that it is more convenient
than the way such taxes are currently collected:

It doesn't
have to be this hard. If Congress would pass eFairness legislation
online retailers would simply collect and remit sales and use taxes
for you at the time of purchase. Brick and mortar retailers do this on
every purchase already and there are several companies that offer
online retailers the ability to fully automate tax collection and
remittance, so we know it isn't too complicated to do. Additionally,
this streamlined process would ensure that cities and states
governments get the funds they need to operate.

First,
just because computers make something easier doesn't mean it's a good
idea. Second, I'd personally find having more of my own money more
convenient than having it stolen more efficiently. (Note that such an option isn't even on the radar for these people.) The people for whom this proposal is truly convenient are
the loot-and-spend politicians who do not stand for
limited government.

... As
early as 2001, William F. Buckley advised the Republicans "come to
Earth" and find a way to collect state sales taxes. Buckley even had
the gall to frame the idea as a blow for limited government: "The
mattress maker in Connecticut is willing to compete with the company
in Massachusetts, but does not like it if out-of-state businesses are,
in practical terms, subsidized." Hogwash. The Massachusetts company is
no more subsidized by not being taxed than a schoolyard bully's
non-victims are getting free lunches. Unfortunately, as historian
C. Bradley Thompson once argued,
conservatives seem more interested in taking over the welfare state
than ending it...

2 comments:

Computers do not make this tax collection easier. In fact, it requires a very expensive and complicated product categorization before installing the software. The software installation is more accurately described as an integration b/c it has to work with existing carts (which more than half of the cart systems online would not work with this new govt mandated software.) In addition, the software requires different API's (plugins) from each state that collects the tax and comes with different exceptions and tax holidays. There are over 10k tax jurisdictions so this is quite complicated. Even if the software works flawlessly (yeah right) and is integrated flawlessly (yeah right), it will not work if product is not categorized properly on the business side. It would require a whole new skill and service to do this, which many small businesses could not afford or successfully develop. (One reason why big biz is behind the legislation...to squash smaller competitors). It also subjects these businesses it multiple audits and audit inquiries from tax authorities that aren't always state departments of revenue. They can be 3rd parties. (Onerous audits are crippling enough, think about a possibility of 50 of them, plus from US territories.) Speaking of 3rd parties, this govt software still has no solution for accounting multi-level/3rd party sales. And, would require many companies to throw out software they've already invested in, and rebuild part or all of their website/shopping structures. On top of all this, NONE of this is required of brick and mortar stores. Just online stores. (The reason b/m biz is behind the legislation) Shoppers may be concerned as well...b/c the software will categorize every purchase for every home and potentially create a NSA-style shopping profile that would be highly valued by private and public groups. To make matters worse, foreign companies will not be expected to take on the cost and regulation, so they can continue to undercut American business. So, RTPA is MFA 2.0, but it's also removes the small remote seller exemption ($1mil sales or less) if the business ever sales on ebay or Amazon, etc. In other words, the exemption basically is void in this bill. Thanks for taking on this subject. Sorry for trolling, but I wanted to add to your insight and support your efforts. -dave